Silver Price Forecasts: XAG/USD stalls below $58.00 despite US Dollar weakness

Silver price (XAG/USD) has risen above $57.50 on Monday, trading around $57.60 per troy ounce during Asian hours. This gain comes as traders decrease expectations for a Federal Reserve (Fed) rate increase in October. Fed Chairman Kevin Warsh, speaking at an International Monetary Fund event on Friday, stated that he does not anticipate interest-rate decisions at the upcoming October 27-28 meeting.

Market sentiment has shifted, with traders now pricing an 83.9% probability that the Fed will keep interest rates unchanged, up from 49% a month earlier. Safe-haven demand has supported precious metals amid rising anxieties around AI-related investments, which have led to a broader stock market selloff and lower bond yields. Rabobank notes that the AI complex has seen significant volatility, with CoreWeave's bonds facing criticism and investors dumping data center bonds.

Silver, historically used as a store of value and hedge during high-inflation periods, is a precious metal that can be bought as physical coins or bars or traded through Exchange Traded Funds. Its price is influenced by factors such as geopolitical instability, interest rates, the US Dollar's strength, investment demand, mining supply, and recycling rates.

Silver's price often correlates with Gold's moves, as both are considered safe-haven assets. Some investors view a high Gold/Silver ratio as an indicator that Silver is undervalued. In the Asian session on Monday, AUD/USD attracted follow-through buyers, extending its recovery towards 0.7000 in light of strong Chinese Q3 GDP and activity data.

Meanwhile, USD/JPY remained defensive near 158.00 as US bond yields stayed low, and BoJ Governor Kazuo Ueda's hawkish remarks weighed on the Japanese Yen. However, Fed rate-hike bets and geopolitical uncertainties may limit USD losses and the pair's decline.